After years of grooming, John Elkann is stepping up to take a high-profile role at Fiat SpA, the auto maker at the center of the Agnelli family's sprawling industrial dynasty.

Mr. Elkann, a great-great-grandson of Giovanni Agnelli, who helped found Fiat in 1899, will be appointed chairman when Fiat's board meets Wednesday, Fiat Chief Executive Sergio Marchionne told a news conference in Turin Tuesday. Mr. Elkann will succeed Luca Cordero di Montezemolo, who told the news conference he will remain on Fiat's board and keep his position as chairman of Fiat-owned Ferrari.

Mr. Elkann's appointment will coincide with the unveiling of Fiat's five-year business plan, which is expected to offer details on the long-awaited spinoff of Fiat's passenger-car unit, Fiat Group Automobiles.

The move signals a shift for the New York-born Mr. Elkann, who until now has mainly played a background role at Fiat, the best-known part of the Agnelli empire, which includes auto makers Ferrari and Maserati, the Italian newspaper La Stampa and the Turin-based soccer club Juventus. Fiat also has a 20% stake in Chrysler Group LLC.

"Tomorrow is a very important day for Fiat and for me," Mr. Elkann told reporters on Tuesday.

Until recently, Mr. Elkann had shunned playing a more dominant role at the auto maker, leaving all management duties at Fiat to Mr. Marchionne, the company's hard-charging CEO. As chairman, Mr. Elkann will play an important role in managing relations between the Italian government and Fiat, Italy's largest private-sector employer.

Mr. Elkann's decision to remain on the sidelines for years was in part an acknowledgment of the pain the family inflicted on the auto company in recent decades by trying to run Fiat itself.

Under the leadership of Mr. Elkann's grandfather, Gianni Agnelli, Fiat grew into one of the world's biggest auto makers, but it also became a symbol of European industrialists who saw themselves as guarantors of social pacts between governments and workers.

Mr. Agnelli often resisted closing even money-losing factories in Italy to preserve jobs and avoid tarnishing the family's reputation. Fiat's management ranks, meanwhile, swelled with underperforming managers who kept their jobs thanks to strong ties to the family. By the time Mr. Agnelli died in 2003, Fiat was facing financial ruin and was saddled with an empty product pipeline and billions of euros in debt.

By then, Mr. Elkann's profile was on the rise in the family. The son of Margherita Agnelli de Pahlen and Alain Elkann, a French novelist, Mr. Elkann attended grade school in New York and high school in Paris before earning a degree in industrial engineering from the Polytechnic University of Turin. To learn about auto making, he worked incognito in a Fiat factory.

In 1997, when he was 22 years old, Mr. Elkann was named to the Fiat board to replace a cousin, Giovanni Alberto, who was preparing to head the auto maker but died of cancer at 33.

Several years later, Mr. Elkann was chosen to run the family fortune and began charting a new course. He sold off treasured family assets, such as the legendary French winery Chateau Margaux, paving the way for the family to inject $313 million of its own money into Fiat. The move helped the struggling auto maker stave off bankruptcy.

Mr. Elkann also tapped Mr. Marchionne, an accountant and lawyer who had become head of a large industrial-services company but had little automotive experience, to head Fiat, giving him free rein. Mr. Marchionne quickly cut away layers of management at the auto maker and sped up the time for Fiat to move new cars from the drawing board to the assembly line. Less than two years after Mr. Marchionne's arrival, Fiat was back in the black.

As Mr. Marchionne turned around Fiat, Mr. Elkann eschewed the spotlight. Mr. Montezemolo, head of Fiat-owned Ferrari, was named chairman of Fiat in 2004, while Mr. Elkann took the lower-profile title of deputy chairman.

But over the past two years, Mr. Elkann has begun to take a more assertive role in the family business. In 2008, he merged two of the Agnelli family's holding companies to create Exor, the holding company that owns a controlling stake in Fiat and myriad other businesses such as Juventus and the U.S. real-estate services company Cushman & Wakefield. That move helped make the Agnelli empire more transparent by streamlining the chain of holding companies between Exor and Giovanni Agnelli & Co., the family's main investment vehicle. Mr. Elkann will become chairman of Gianni Agnelli & Co in May, replacing his long-time mentor, Gianluigi Gabetti.

Last year, as Fiat worked to take over Chrysler in a U.S.-financed bankruptcy restructuring, Mr. Elkann traveled to Washington, D.C., to reassure lawmakers that the Agnelli family stood behind the controversial move. Coming at the height of the financial crisis, Fiat's takeover established Mr. Elkann and the Agnellis as one of the more daring dynasties among Europe's auto-making families.